WORKING CAPITAL MANAGEMENT - IT’S IMPACT ON LIQUIDITY AND PROFITABILITY - A STUDY OF KERALA MINERALS AND METALS LTD

Working capital management involves the various steps for the proper management of current assets and current liabilities which avoids the risk of a shortage of funds for meeting short-term obligations and eliminates the blocking of funds in current assets on the other hand. The present study makes an attempt to give a conceptual insight on working capital management and assess its impact on liquidity and profitability of Kerala Minerals and Metals Ltd. A proper tradeoff between profitability and liquidity is necessary for every enterprise to survive in any kind of environment. The study also made an attempt to analyse the liquidity and profitability position of KMML. For this, correlation and spearman's rank has been used. The study covers ten-year data from 2009-10 to 2018-19. The correlation and spearman's ranking method exhibits a weak correlation and negative relationship between liquidity and profitability. The Motaal's test has also been applied to test the liquidity position. The liquidity ratios such as the current ratio and liquid ratios are higher than the benchmark which means that the liquidity position is good. The study indicates that the liquidity position of the enterprise has enhanced over the period of study.